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Reason investors purchase mutual funds

Updated: 9/18/2023
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14y ago

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Some reasons are:

  1. It is a boon for a novice investor who does not know much about the Stock Market but still wants to invest in stocks
  2. The fund manager is usually a very capable and qualified individual who has significant exposure to stock market investing and hence he would be able to generate more returns on our investments than what would be if we pick our stocks
  3. We can invest even in small amounts
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Q: Reason investors purchase mutual funds
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How do mutual funds obtain capital besides investors investments and charging investors fees?

There are no other ways for mutual funds to obtain capital


mutual funds provide stability to share prices safety to investors and resources?

Hedge funds are not mutual funds as hedge funds cannot be sold to the general public


Mutual funds provide stability to share prices safety to investors and resources to the prospective entrepreneurs Critically examine this statement with suitable examples?

Mutual funds are platforms that pool in a set of investors money and invest in stocks and securities for mutual benefit of all the investors and the fund as a whole. Mutual funds are of various types such as debt funds, equity funds, mix funds etc. Mutual funds usually invest in a variety of stocks and the same is difficult to be achieved by an individual investor. Investing in a variety of stocks provides stability of prices, safety of returns majorly due to diversification. Also, mutual funds are governed by laws and regulations that assures the investors of safety and security. Since, mutual funds are able to pool in funds from a large group of investors they provide financial resources to a companies and entrepreneurs.


What would be the purpose of investing in mutual funds?

Mutual funds are a way for investors to invest safely. Mutual funds pool together stocks, bonds, and commodities, and investors get a piece of every thing, which makes it a safe way to invest in other things without a great loss.


Why are they called mutual funds?

Mutual funds are called mutual because a large number of investors' provided money to form a pool to be managed by knowledgeable investment professionals.

Related questions

How do mutual funds obtain capital besides investors investments and charging investors fees?

There are no other ways for mutual funds to obtain capital


mutual funds provide stability to share prices safety to investors and resources?

Hedge funds are not mutual funds as hedge funds cannot be sold to the general public


Mutual funds provide stability to share prices safety to investors and resources to the prospective entrepreneurs Critically examine this statement with suitable examples?

Mutual funds are platforms that pool in a set of investors money and invest in stocks and securities for mutual benefit of all the investors and the fund as a whole. Mutual funds are of various types such as debt funds, equity funds, mix funds etc. Mutual funds usually invest in a variety of stocks and the same is difficult to be achieved by an individual investor. Investing in a variety of stocks provides stability of prices, safety of returns majorly due to diversification. Also, mutual funds are governed by laws and regulations that assures the investors of safety and security. Since, mutual funds are able to pool in funds from a large group of investors they provide financial resources to a companies and entrepreneurs.


What mutual funds invest in insurance cos.?

why the people are selecting mutual funds the reason as listed below. Professional Management> The Mutual fund managers do the research for investors who invest the money in their mutual funds. and they will invest the money in different composes stocks, debts. Affordability> Most mutual funds set a relatively low dollar amount for initial investment and subsequent purchases. Read more- hemanthmutualfund


What are people who invest in mutual funds called?

They are called Mutual Fund Investors or Mutual Fund Unit Holders.


What is A company that uses the money it receives from investors to buy securities from corporations and governments?

A company that uses the money it receives from investors to buy securities from corporations and governments is called an investment company. These companies pool money from multiple investors and use it to purchase a diversified portfolio of stocks, bonds, or other securities on behalf of their investors. Examples of investment companies include mutual funds, exchange-traded funds (ETFs), and closed-end funds.


Why do many investors like mutual funds?

Because not many investors know how to track the stock market and choose stocks effectively. That is why they prefer Mutual Funds where an expert fund manager does this on our behalf


What would be the purpose of investing in mutual funds?

Mutual funds are a way for investors to invest safely. Mutual funds pool together stocks, bonds, and commodities, and investors get a piece of every thing, which makes it a safe way to invest in other things without a great loss.


Why are they called mutual funds?

Mutual funds are called mutual because a large number of investors' provided money to form a pool to be managed by knowledgeable investment professionals.


What is a non load mutual fund?

A no-load mutual fund is one that does not charge a fee to investors. Many mutual funds have a "load" or initial fee, often around 5%, that investors must pay in order to buy in to the fund. No-load mutual funds lack this fee, and earn money for their managers in different ways. Most index funds are no-load funds.


What does Aim Mutual Funds do?

Aim Mutual Funds provides a variety of Mutual Funds to suit various investment objectives. These funds would include stock and bond funds with various amounts of risk and return ratios for different types of investors.


Which instruments invests money from many investors in stocks and other securities?

Mutual funds and Hedge Funds